Over the past 48 hours, the US housing industry has shown signs of stabilization alongside persistent challenges. National mortgage rates have slowly declined, making home loans slightly more accessible. As of October 8, the average rate for a 30-year fixed mortgage fell to 6.42 percent, down about 10 basis points from the week prior. This is the lowest level in over a year and marks a welcome shift for buyers who struggled with affordability earlier in 2025.
Mid-October 2025 has been identified as the most buyer-friendly period of the year, with home prices forecasted to be 3.4 percent lower than peak summer values, and housing inventory projected to be 32.6 percent higher than it was at the year's start. This increased selection, coupled with slower property movement, gives buyers more leverage and time to negotiate, with typical homes lingering about two weeks longer on the market compared to the summer rush.
Despite falling rates, consumer sentiment remains cautious. Fannie Mae's latest survey reveals 73 percent of consumers think it is a bad time to buy a home. Sellers are also frustrated, causing listing withdrawals to hit 42.3 percent of new listings in September, the highest rate for that month in recent history. Many are waiting for improved conditions, creating a shadow inventory that could fuel activity in 2026.
Regional disparities persist. San Francisco, for example, is seeing brisk activity thanks to the local AI boom, with home sales up 35 percent year over year and rents increasing 12 percent over the same period. Nationally, though, elevated home prices and low supply continue to restrict access, tempered only partially by wage growth now outpacing inflation.
Industry leaders are responding with flexible seller concessions and competitive financing products. Private sellers are increasingly willing to offer rate buydowns or contribute to closing costs to close deals. Refinancing activity has also ticked up as consumers seek relief from earlier higher-rate loans.
Compared to last quarter, rates are lower and selection is higher, but overall transaction volumes remain subdued, and industry pessimism persists. The market is positioning for a possible rebound if economic conditions and consumer confidence improve through the end of the year.
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